Key insights
- The post expresses concern that US GDP growth is overly reliant on digital services, particularly AI, suggesting a potential bubble. It questions whether the current AI boom is a genuine industrial revolution or a Ponzi scheme, drawing parallels to the 1870s railway stock bubble. This raises bearish concerns about the sustainability of current tech stock valuations and their contribution to overall market growth.
A statistic (from Harvard) that is concerning me is that 4% of Americas GDP is 'digital services' but consists 92% of American GDP growth. Basically US growth is stagnate apart from AI, and that looks more like a massive Ponzi scheme at the moment.
Looking at my portfolio breakdown, I definitely am getting all my growth from tech stocks, biggest is 5.4% in Space X (all funds, as British, I use investment trusts).
So what are opinions here, for and against riding this AI wave?
Revolutionary or Ponzi scheme, or 1870 railway stocks (was Revolutionary but stocks did badly)?